General Motors Co (GM) said on Thursday it had placed two engineers on paid leave as part of an internal investigation into defective ignition switches linked to 13 deaths and the global recall this year of 2.6 million cars.
Reuters has confirmed that the engineers are Ray DeGiorgio and Gary Altman.
The automaker also said it would take a higher-than-expected charge of US$1.3 billion in the first quarter, primarily to cover the cost of recall-related repairs and courtesy transportation, compared with the previously announced US$750 million charge.
Photo: Bloomberg
The automaker said US dealers, in addition to replacing ignition switches on the recalled cars, will replace ignition lock cylinders because ignition keys can be removed while the engine is running. The issue could cause a vehicle to roll away and crash.
GM said it was aware of “several hundred complaints” of keys coming out of ignitions on the recalled cars, and at least one rollaway incident and crash that caused one injury, but no reported fatalities.
The recalled cars include the Chevrolet Cobalt and Saturn Ion, and span model years 2003 to 2011.
DeGiorgio designed the original switch for the 2003 Saturn Ion that went into production in August 2002. Versions of that switch were used in other GM models, including the Chevrolet Cobalt, that are also part of the global recall.
GM chief executive Mary Barra, testifying last week before the US Congress, was challenged by Democratic Senator Claire McCaskill, who said “a culture of cover-up” caused DeGiorgio to deliver untruthful testimony about his knowledge of the defective ignition switch during his deposition last year for a lawsuit related to a fatal 2010 crash in Georgia.
DeGiorgio said then that the Ion/Cobalt switch was “one of my first ignition switches.”
The defective switch was redesigned in 2006, according to GM.
DeGiorgio denied in his deposition that he knew of the change, but US congressional investigators produced an internal GM document showing DeGiorgio had signed off on the change in April 2006.
“He lied” about his knowledge of the defective part, McCaskill said.
Barra said she had seen indications of that as well, but she wanted to let the company probe run its course over the next two months.
Altman was the program engineering manager on the Ion and Cobalt. In a deposition in the same lawsuit last year, Altman was asked by the plaintiffs’ attorney whether GM had made a business decision in 2005 not to fix the switch.
Barra said the engineers were placed on leave after she was briefed by Anton Valukas, who is heading GM’s internal investigation. Valukas is the chairman of Jenner & Block. GM has worked with Jenner & Block since 2002, and at least two of the automaker’s former top attorneys, Robert Osborne and Elmer Johnson, were partners at the Chicago law firm.
“This is an interim step as we seek the truth about what happened,” Barra said in a statement.
The National Highway Traffic Safety Administration is fining GM US$7,000 a day for missing an April 3 deadline to provide information about the recall.
The regulator said on Tuesday that the automaker had not responded to more than a third of its questions by the deadline.
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